PennantPark Investment Corporation, et al.; Notice of Application, 27674-27675 [2011-11622]

Download as PDF 27674 Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices May 8, 2011. Elizabeth M. Murphy, Secretary. Chief, at (202) 551–6874 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or an applicant using the Company name box, at http:// www.sec.gov/search/search.htm or by calling (202) 551–8090. [FR Doc. 2011–11627 Filed 5–11–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 29665; 812–13772] wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 PennantPark Investment Corporation, et al.; Notice of Application Applicants’ Representations 1. The Company, a Maryland corporation, is an externally managed, May 6, 2011. non-diversified, closed-end AGENCY: Securities and Exchange management investment company that Commission (‘‘Commission’’). has elected to be regulated as a business ACTION: Notice of an application for an development company (‘‘BDC’’) under order under section 6(c) of the the Act.1 The Company’s investment Investment Company Act of 1940 (the objectives are to generate both current ‘‘Act’’) for an exemption from sections income and capital appreciation in the 18(a) and 61(a) of the Act. form of mezzanine debt, senior secured loans and equity investments through APPLICANTS: PennantPark Investment debt and equity investments primarily Corporation (the ‘‘Company’’), in U.S. middle market private PennantPark SBIC GP, LLC (the companies. The Investment Adviser, a ‘‘General Partner’’), PennantPark SBIC Delaware limited liability company, is LP (‘‘PennantPark SBIC’’) and the external investment adviser to the PennantPark Investment Advisers, LLC Company. The Investment Adviser is (the ‘‘Investment Adviser’’) registered under the Investment SUMMARY OF THE APPLICATION: The Advisers Act of 1940. Company requests an order to permit it 2. PennantPark SBIC, a Delaware to adhere to a modified asset coverage limited liability company, is a small requirement. business investment company (‘‘SBIC’’) DATES: Filing Dates: The application was licensed by the Small Business filed on May 12, 2010 and amended on Administration (‘‘SBA’’) to operate September 7, 2010, February 18, 2011, under the Small Investment Act of 1958 and May 2, 2011. (‘‘SBIA’’). PennantPark SBIC is excluded HEARING OR NOTIFICATION OF HEARING: An from the definition of investment company by section 3(c)(7) of the Act. order granting the application will be The Company directly owns 99% of issued unless the Commission orders a hearing. Interested persons may request PennantPark SBIC in the form of limited partnership interests. The General a hearing by writing to the Partner, which is a wholly-owned Commission’s Secretary and serving subsidiary of the Company, owns 1% of applicants with a copy of the request, PennantPark SBIC in the form of a personally or by mail. Hearing requests general partnership interest. The should be received by the Commission Company is the sole member of the by 5:30 p.m. on May 31, 2011 and General Partner. should be accompanied by proof of service on the Applicants, in the form Applicants’ Legal Analysis of an affidavit or, for lawyers, a 1. The Company requests an certificate of service. Hearing requests exemption pursuant to section 6(c) of should state the nature of the writer’s the Act from the provisions of sections interest, the reason for the request, and 18(a) and 61(a) of the Act to permit it the issues contested. Persons who wish to adhere to a modified asset coverage to be notified of a hearing may request requirement with respect to any direct notification by writing to the or indirect wholly owned subsidiary of Commission’s Secretary. the Company that is licensed by the ADDRESSES: Secretary, U.S. Securities SBA to operate under the SBIA as a and Exchange Commission, 100 F Street, NE., Washington, DC 20549– 1 Section 2(a)(48) defines a BDC to be any closed1090. Applicants, 590 Madison Avenue, end investment company that operates for the 15th Floor, New York, New York 10022. purpose of making investments in securities described in section 55(a)(1) through 55(a)(3) of the FOR FURTHER INFORMATION CONTACT: Act and makes available significant managerial Laura J. Riegel, Senior Counsel, at (202) assistance with respect to the issuers of such 551–6873, or Dalia Osman Blass, Branch securities. VerDate Mar<15>2010 14:49 May 11, 2011 Jkt 223001 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 SBIC and relies on Section 3(c)(7) for an exemption from the definition of ‘‘investment company’’ under the 1940 Act (each, a ‘‘SBIC Subsidiary’’).2 Applicants state that companies operating under the SBIA, such as the SBIC Subsidiary, will be subject to the SBA’s substantial regulation of permissible leverage in its capital structure. 2. Section 18(a) of the Act prohibits a registered closed-end investment company from issuing any class of senior security or selling any such security of which it is the issuer unless the company complies with the asset coverage requirements set forth in that section. Section 61(a) of the Act makes section 18 applicable to BDCs, with certain modifications. Section 18(k) exempts an investment company operating as an SBIC from the asset coverage requirements for senior securities representing indebtedness that are contained in section 18(a)(1)(A) and (B). 3. Applicants state that the Company may be required to comply with the asset coverage requirements of section 18(a) (as modified by section 61(a)) on a consolidated basis because the Company may be deemed to be an indirect issuer of any class of senior security issued by PennantPark SBIC or another SBIC Subsidiary. Applicants state that applying section 18(a) (as modified by section 61(a)) on a consolidated basis generally would require that the Company treat as its own all assets and any liabilities held directly either by itself, by PennantPark SBIC, or by another SBIC Subsidiary. Accordingly, the Company requests an order under section 6(c) of the Act exempting the Company from the provisions of section 18(a) (as modified by section 61(a)), such that senior securities issued by each SBIC Subsidiary that would be excluded from the SBIC Subsidiary’s asset coverage ratio by section 18(k) if it were itself a BDC would also be excluded from the Company’s consolidated asset coverage ratio. 4. Section 6(c) of the Act, in relevant part, permits the Commission to exempt any transaction or class of transactions from any provision of the Act if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state 2 All existing entities that currently intend to rely on the order are named as applicants. Any other existing or future entity that may rely on the order in the future will comply with the terms and condition of the order. E:\FR\FM\12MYN1.SGM 12MYN1 Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices that the requested relief satisfies the section 6(c) standard. Applicants contend that, because the SBIC Subsidiary would be entitled to rely on section 18(k) if it were a BDC itself, there is no policy reason to deny the benefit of that exemption to the Company. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: The Company shall not issue or sell any senior security, and the Company shall not cause or permit PennantPark SBIC or any other SBIC Subsidiary to issue or sell any senior security of which the Company, PennantPark SBIC or any other SBIC Subsidiary is the issuer except to the extent permitted by section 18 (as modified for BDCs by section 61) of the Act; provided that, immediately after the issuance or sale by any of the Company, PennantPark SBIC or any other SBIC Subsidiary of any such senior security, the Company, individually and on a consolidated basis, shall have the asset coverage required by section 18(a) of the Act (as modified by section 61(a)). In determining whether the Company has the asset coverage on a consolidated basis required by section 18(a) of the Act (as modified by section 61(a)), any senior securities representing indebtedness of PennantPark SBIC or another SBIC Subsidiary shall not be considered senior securities and, for purposes of the definition of ‘‘asset coverage’’ in section 18(h), shall be treated as indebtedness not represented by senior securities. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Elizabeth M. Murphy, Secretary. [FR Doc. 2011–11622 Filed 5–11–11; 8:45 am] wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64420; File No. SR–NYSE– 2011–21] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Rule 80C To Include Additional Securities in the Pilot by Which Such Rule Operates and Amending Rule 104 To Simplify Certain Aspects of the Text While Also Conforming Certain of the Percentages Thereunder to the Proposed Changes to Rule 80C May 6, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 4, 2011, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by NYSE. The Commission is publishing this notice to solicit comments on the proposed rule change, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// www.nyse.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 2 17 VerDate Mar<15>2010 14:49 May 11, 2011 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00043 Fmt 4703 27675 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C. The Commission approved Rule 80C on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (‘‘Trading Pause’’) in all securities included within the S&P 500® Index (‘‘S&P 500’’) (‘‘Trading Pause Pilot’’ or ‘‘Pilot’’).3 The Exchange noted in its filing to adopt Rule 80C that during the Pilot period it would continue to assess whether additional securities need to be added and whether the parameters of Rule 80C would need to be modified to accommodate trading characteristics of different securities. The Exchange subsequently received approval to add to the Pilot the securities included in the Russell 1000® Index (‘‘Russell 1000’’).4 3 The Commission approved the Trading Pause Pilot for all equities exchanges and FINRA. See Securities Exchange Act Release No. 62252 (June 10, 2010), 75 FR 34186 (June 16, 2010) (File Nos. SR–BATS–2010–014; SR–EDGA–2010–01; SR– EDGX–2010–01; SR–BX–2010–037; SR–ISE–2010– 48; SR–NYSE–2010–39; SR–NYSEAmex–2010–46; SR–NYSEArca–2010–41; SR–NASDAQ–2010–061; SR–CHX–2010–10; SR–NSX–2010–05; and SR– CBOE–2010–047) and Securities Exchange Act Release No. 62251 (June 10, 2010), 75 FR 34183 (June 16, 2010) (SR–FINRA–2010–025). The Exchange submitted a proposed rule change shortly after the initial Commission approval order to clarify the procedures applicable to reopening. See Securities Exchange Act Release No. 62284 (June 11, 2010), 75 FR 34498 (June 17, 2010) (SR–NYSE– 2010–45). 4 The Commission approved the addition to the Trading Pause Pilot of the securities included in the Russell 1000 and a specified list of Exchange Traded Products (‘‘ETPs’’), where applicable, for all equities exchanges and FINRA. See Securities Exchange Act Release No. 62884 (September 10, 2010), 75 FR 56618 (September 16, 2010) (File Nos. SR–BATS–2010–018; SR–BX–2010–044; SR–CBOE– 2010–065; SR–CHX–2010–14; SR–EDGA–2010–05; SR–EDGX–2010–05; SR–ISE–2010–66; SR– NASDAQ–2010–079; SR–NYSE–2010–49; SR– NYSEAmex–2010–63; SR–NYSEArca–2010–61; and SR–NSX–2010–08 and Securities Exchange Act Release No. 62883 (September 10, 2010), 75 FR 56608 (September 16, 2010) (SR–FINRA–2010–033). The Exchange submitted a proposed rule change shortly after the addition of the Russell 1000 securities to extend the operation of the Pilot, which was set to expire on December 10, 2010, until April 11, 2011. See Securities Exchange Act Release No. 63500 (December 9, 2010), 75 FR 78309 (December 15, 2010) (SR–NYSE–2010–81). The Pilot is currently set to expire on the earlier of August 11, 2011 or the date on which a limit up/ Continued Sfmt 4703 E:\FR\FM\12MYN1.SGM 12MYN1

Agencies

[Federal Register Volume 76, Number 92 (Thursday, May 12, 2011)]
[Notices]
[Pages 27674-27675]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11622]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29665; 812-13772]


PennantPark Investment Corporation, et al.; Notice of Application

May 6, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') for an exemption from 
sections 18(a) and 61(a) of the Act.

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Applicants: PennantPark Investment Corporation (the ``Company''), 
PennantPark SBIC GP, LLC (the ``General Partner''), PennantPark SBIC LP 
(``PennantPark SBIC'') and PennantPark Investment Advisers, LLC (the 
``Investment Adviser'')

Summary of the Application: The Company requests an order to permit it 
to adhere to a modified asset coverage requirement.

DATES: Filing Dates: The application was filed on May 12, 2010 and 
amended on September 7, 2010, February 18, 2011, and May 2, 2011.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on May 31, 2011 and should be accompanied by proof of service on 
the Applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants, 590 Madison Avenue, 
15th Floor, New York, New York 10022.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873, or Dalia Osman Blass, Branch Chief, at (202) 551-6874 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Company, a Maryland corporation, is an externally managed, 
non-diversified, closed-end management investment company that has 
elected to be regulated as a business development company (``BDC'') 
under the Act.\1\ The Company's investment objectives are to generate 
both current income and capital appreciation in the form of mezzanine 
debt, senior secured loans and equity investments through debt and 
equity investments primarily in U.S. middle market private companies. 
The Investment Adviser, a Delaware limited liability company, is the 
external investment adviser to the Company. The Investment Adviser is 
registered under the Investment Advisers Act of 1940.
---------------------------------------------------------------------------

    \1\ Section 2(a)(48) defines a BDC to be any closed-end 
investment company that operates for the purpose of making 
investments in securities described in section 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------

    2. PennantPark SBIC, a Delaware limited liability company, is a 
small business investment company (``SBIC'') licensed by the Small 
Business Administration (``SBA'') to operate under the Small Investment 
Act of 1958 (``SBIA''). PennantPark SBIC is excluded from the 
definition of investment company by section 3(c)(7) of the Act. The 
Company directly owns 99% of PennantPark SBIC in the form of limited 
partnership interests. The General Partner, which is a wholly-owned 
subsidiary of the Company, owns 1% of PennantPark SBIC in the form of a 
general partnership interest. The Company is the sole member of the 
General Partner.

Applicants' Legal Analysis

    1. The Company requests an exemption pursuant to section 6(c) of 
the Act from the provisions of sections 18(a) and 61(a) of the Act to 
permit it to adhere to a modified asset coverage requirement with 
respect to any direct or indirect wholly owned subsidiary of the 
Company that is licensed by the SBA to operate under the SBIA as a SBIC 
and relies on Section 3(c)(7) for an exemption from the definition of 
``investment company'' under the 1940 Act (each, a ``SBIC 
Subsidiary'').\2\ Applicants state that companies operating under the 
SBIA, such as the SBIC Subsidiary, will be subject to the SBA's 
substantial regulation of permissible leverage in its capital 
structure.
---------------------------------------------------------------------------

    \2\ All existing entities that currently intend to rely on the 
order are named as applicants. Any other existing or future entity 
that may rely on the order in the future will comply with the terms 
and condition of the order.
---------------------------------------------------------------------------

    2. Section 18(a) of the Act prohibits a registered closed-end 
investment company from issuing any class of senior security or selling 
any such security of which it is the issuer unless the company complies 
with the asset coverage requirements set forth in that section. Section 
61(a) of the Act makes section 18 applicable to BDCs, with certain 
modifications. Section 18(k) exempts an investment company operating as 
an SBIC from the asset coverage requirements for senior securities 
representing indebtedness that are contained in section 18(a)(1)(A) and 
(B).
    3. Applicants state that the Company may be required to comply with 
the asset coverage requirements of section 18(a) (as modified by 
section 61(a)) on a consolidated basis because the Company may be 
deemed to be an indirect issuer of any class of senior security issued 
by PennantPark SBIC or another SBIC Subsidiary. Applicants state that 
applying section 18(a) (as modified by section 61(a)) on a consolidated 
basis generally would require that the Company treat as its own all 
assets and any liabilities held directly either by itself, by 
PennantPark SBIC, or by another SBIC Subsidiary. Accordingly, the 
Company requests an order under section 6(c) of the Act exempting the 
Company from the provisions of section 18(a) (as modified by section 
61(a)), such that senior securities issued by each SBIC Subsidiary that 
would be excluded from the SBIC Subsidiary's asset coverage ratio by 
section 18(k) if it were itself a BDC would also be excluded from the 
Company's consolidated asset coverage ratio.
    4. Section 6(c) of the Act, in relevant part, permits the 
Commission to exempt any transaction or class of transactions from any 
provision of the Act if and to the extent that such exemption is 
necessary or appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act. Applicants state

[[Page 27675]]

that the requested relief satisfies the section 6(c) standard. 
Applicants contend that, because the SBIC Subsidiary would be entitled 
to rely on section 18(k) if it were a BDC itself, there is no policy 
reason to deny the benefit of that exemption to the Company.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    The Company shall not issue or sell any senior security, and the 
Company shall not cause or permit PennantPark SBIC or any other SBIC 
Subsidiary to issue or sell any senior security of which the Company, 
PennantPark SBIC or any other SBIC Subsidiary is the issuer except to 
the extent permitted by section 18 (as modified for BDCs by section 61) 
of the Act; provided that, immediately after the issuance or sale by 
any of the Company, PennantPark SBIC or any other SBIC Subsidiary of 
any such senior security, the Company, individually and on a 
consolidated basis, shall have the asset coverage required by section 
18(a) of the Act (as modified by section 61(a)). In determining whether 
the Company has the asset coverage on a consolidated basis required by 
section 18(a) of the Act (as modified by section 61(a)), any senior 
securities representing indebtedness of PennantPark SBIC or another 
SBIC Subsidiary shall not be considered senior securities and, for 
purposes of the definition of ``asset coverage'' in section 18(h), 
shall be treated as indebtedness not represented by senior securities.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-11622 Filed 5-11-11; 8:45 am]
BILLING CODE 8011-01-P